Executive Search Firms -- Retained or Contingency

The Difference Between Retained
and Contingency Executive Search Firms

You're interested in getting involved with an executive search firm, but you aren't really sure about the different options that are available. We're going to try to help you sort out the best firm to contact.

Essentially, executive search firms are set into two categories – retained or contingency.

Retained executive recruiters work for a company. They have been hired, on a retainer, by a company or organization looking to find the perfect candidate for their job opening. Their pay is usually in the area of one-third of the annual salary of the person they are looking for, split into three payments. For example, if the annual salary were $200,000, the recruiter's pay would be $66,000 for finding the best candidate. They would be paid $22,000 up front, another $22,000 after 30 days, and the final $22,000 once the candidate is found. Some retained recruiters have a set fee no matter the salary of the executive they are looking for. In many cases, retained recruiters are looking for the upper-level management teams and CEO's. These are people that are hard to find for a company and therefore it's a tough job for a recruiter to convince a CEO from one company to jump ship, to another.

Contingency recruiters, on the other hand only get paid after they find a job candidate. Instead of searching for a candidate as a company needs it, they will instead always keep their eyes open for good candidates in the corporate executive world and then try to 'sell' that candidate to all the companies they work with. They will only get a payment if they can find a company that is looking for someone and bites on their offer. For the most part, mid-level executives are found through contingency recruiters. Since they have a set fee, per placement, they often have a large database of possible candidates at their fingertips, to hopefully quickly place a person with a company in need.

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